Raising opportunity

The costs of living in poverty can be high. In a recent National Public Radio report, Martin Eakes, founder and CEO of the Center for Community Self-Help in Durham, made a well-reasoned case that "physically, literally, in dollars and cents, it is more expensive to be poor than it is to be middle-class."

In low-income communities, residents typically find convenience stores instead of grocery stores, check-cashing businesses rather than banks, Eakes noted. Without health insurance and doctor visits, they may rely on hospital emergency rooms for health care.

Such conditions reinforce a cycle of poverty that can trap low-wage workers, the nation’s working poor, in a subsistence mode that offers little, if any, opportunity for upward mobility. The entrenchment of that cycle is a compelling reason why the state House should have passed a bill that in its final form would have raised North Carolina’s minimum wage by $1 — from the current $5.15 an hour, equal to the federal minimum wage, to $6.15, effective Jan. 1. The Living Wage Act, sponsored by Rep. Alma Adams, a Greensboro Democrat, originally called for a minimum-wage increase of $1 or more per year for three years, ultimately putting it at $8.50 an hour. The diluted version of the bill died on the House floor in a 52-66 vote on June 1.

Interestingly, one point on which advocates and opponents of raising the minimum wage can agree is that increasing it tends to raise pay for low-wage workers overall, as employers seek to maintain pay differences between workers with more and less experience.

Supporters contend this helps the working poor, many of whom earn more than minimum wage, gain self-sufficiency, ultimately saving taxpayers money. Detractors counter that higher pay results in job losses, greater costs for employers, and could make it harder for the state to attract businesses that rely on entry-level workers. (more…)